*Henderson: USPS Faces Sobering Trends

ANAHEIM, CA-William J. Henderson, the U.S. Postal Service's Postmaster

General told attendees to the Fall 2000 National Postal Forum here

this week that while the USPS in some cases the USPS is facing

the best of times right now, there are also many sobering trends it must


"For the mailing industry and the postal service, these are absolutely the

best of times," Henderson said during the opening general session. "The

best of times because the past five years have been an unprecedented

period of progress and prosperity."

But, if the agency becomes complacent "these could become the worst of

times," he said.

For example, he said that the USPS and the mailing industry "stand

together at the foot of a towering mountain representing three sobering


One sobering trend is consolidation within the mailing industry that is

changing the structure of mail.

"First-Class mail is no longer growing at historical rates, as the mailing

industry seeks to combine bills and advertisements and other pieces into

future mailings."

He cited a report by the American Bankers Association, that said that

banks have reduced mailings by 18 percent since 1996, exclusive of their

sue of electronic banking.

Henderson said that the second sobering trend is electronic billing and

payment systems that are creating another channel into the household

competing with mail, and the third is "good old-fashion competition….

Everything from domestic competitors to foreign posts is remaking

themselves-virtually without constraints-to defend their core businesses

and to mine new business from the opportunities of e-commerce," he said.

As a result, Henderson said the USPS faces three critical challenges that

it must confront in order to stay afloat. Those challenges are:

• Keeping its products affordable;

• Growing with the industry the USPS serves; and

• Removing the regulatory boundaries that prevent the USPS from being the contemporary, efficient, effective brand people want to do business with.

Henderson said that while the agency is doing everything it can to bring

its internal cost structure down, and is working with the mailing industry

on every front to keep the value of its products high and keep them

relevant, he is concerned about regulatory issues. Currently, H.R 22, the Postal Reorganization Act, is stalled in Congress and will probably die by

the end of this session.

"Five years of debate about postal reform in Congress has failed to give

us the flexibility we need to prove our products in line with competitive

market behavior, to invest income freely, or to bring the voice of the

customer into the labor mix, Henderson said. "I say again hat we are a

wholly owned government business and it is time to get down to business on

reform, We needed it five years ago. We need it today."
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